Question

Consider the following for the costs of a pair of jeans:

Direct material costs: $2 per yard and 3 yards are needed

Direct labor costs: $20 per hour and 0.5 hours are needed

Overhead costs: $5 per hour and 1 hour is needed

What is the total cost to make a pair of jeans?

Answer 1

Answer:

Calculation of total cost to make a pair of jeans is as follows:

Total cost for pair of jeans = Direct material cost + Direct labor cost + Overhead cost

= $ 6 + $ 10 + $ 5

= $ 21

Thus, Total cost to make a pair of jeans is $ 21

Working note:

1. Calculation of Direct material cost :

Direct material costs: $2 per yard and 3 yards are needed for a pair

Direct material cost = 3 yards * $ 2 per yard = $ 6

2. Calculation of Direct labor cost :

Direct labor costs: $20 per hour and 0.5 hours are needed for a pair

Direct labor cost = 0.5 hours * $ 20 = $ 10

3. Calculation of Overhead costs:

Overhead costs: $5 per hour and 1 hour is needed for a pair

Overhead costs = 1 hour * $ 5 = $ 5